Corporation Tax Act 2010 section 332C

Generation of investment allowance

Section 332C sets out how a company that participates in a qualifying oil field generates investment allowance based on relievable investment expenditure incurred on or after 1 April 2015.

• A participator in a qualifying oil field that incurs relievable investment expenditure on or after 1 April 2015 receives an investment allowance equal to 62.5% of that expenditure.
• Investment expenditure is only "relievable" to the extent it is incurred for the purposes of oil-related activities; several further restrictions may also apply, including rules on asset acquisitions, fields that previously had field allowances, and fields eligible for onshore allowance.
• The investment allowance is treated as "generated" at the time the expenditure is incurred, by the company concerned and in the qualifying oil field concerned.
• Where expenditure is only partly for oil-related activities, or only partly relates to a particular qualifying oil field, it must be apportioned on a just and reasonable basis.